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What's in Store for Willis Towers (WLTW) in Q4 Earnings?

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Willis Towers Watson Public Limited Company will report fourth-quarter 2019 results on Feb 6, after market close.

The company delivered a positive earnings surprise in two of the last four quarters, the average beat being 0.95%.

Let’s see how things have shaped up for this announcement.

The Zacks Consensus Estimate for earnings per share is pegged at $4.85, suggesting 21.3% growth from the year-ago reported figure.

Willis Towers’ fourth-quarter results are likely to reflect higher organic commissions and fees, expansion across all segments and geographies, solid customer retention levels and growth in new business.

Commissions and fees are expected to have benefited from organic growth across segments.

Human Capital & Benefits, the company’s largest segment, is likely to have benefited from new businesses and strength in core service offerings. The Zacks Consensus Estimate for segmental revenues is pegged at $864 million, indicating a 10.5% upside from the year-ago reported figure.

Corporate Risk & Broking revenues are expected to have been aided by new business and higher renewals. The Zacks Consensus Estimate for Corporate Risk & Broking revenues is pegged at $857 million, implying a 5.5% rise from the year-ago reported figure.

The Benefits Deliver and Administration segment is likely to have delivered solid numbers on the back of continued extension of its client base and increased demand for project work in the mid-market and large-market spaces. The Zacks Consensus Estimate for Benefits Delivery and Administration segment’s revenues stands at $609 million, indicating a skyrocketing increase of 191.4% from the year-earlier reported number.

Consistent enrolment and robust sales are expected to have boosted exchange business.

The Zacks Consensus Estimate for revenues is pegged at $2.6 billion, indicating an upside of 11.3% from the prior-year reported figure.

The fourth quarter is likely to have gained from strong free cash flow.

However, high debt level might have escalated interest expenses. Expenses are likely to have weighed on margin expansion.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for Willis Towers this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. But that is not the case here as you can see below.

Earnings ESP: Willis Towers has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $4.85. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Zacks Rank: Willis Towers carries a Zacks Rank #2.

Stocks to Consider

Some stocks from the insurance industry with the apt combination of elements to surpass estimates this reporting cycle are as follows:

American International Group, Inc. (AIG - Free Report) is slated to report fourth-quarter earnings on Feb 13. It has a Zacks Rank #3 and an Earnings ESP of +3.37%.

Assurant, Inc. (AIZ - Free Report) is set to report fourth-quarter earnings on Feb 11. The company is Zacks #3 Ranked and has an Earnings ESP of +0.62%.

eHealth, Inc. (EHTH - Free Report) is slated to announce fourth-quarter earnings on Feb 2. The stock has an Earnings ESP of +4.84% and is a #3 Ranked player.

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